There was no major economic report printed during the Asian session, so traders focused on pricing in last week’s NFP report and Trump’s not-so-inflexible tariff plans.
- Japan’s preliminary machine tools orders (y/y) slips from 48.8% to 39.5% in February
- Japanese PM Abe in hot water again over cronyism scandal
Shinzo Abe in hot water…again
Abe faces another hurdle after local news reports revealed that the Finance Ministry admitted to altering documents that might implicate Japan’s Prime Minister in selling cheap land to a favored school.
The Ministry of Finance (MoF) found that there were alterations on 62 of 78 pages related to the controversial land sale. In them they also found 14 altered items, which may or may not include striking the name of Akie, Abe’s wife, from the documents.
Remember that Abe has previously said that he will resign if there was proof of the accusation. Today’s revelations spurred speculations that the PM will step down, which will throw off his monetary and fiscal policies.
Risk appetite in the markets
Market players didn’t have a fresh bone to chew on, so they spent the Asian session catching up to their U.S. counterparts.
If you recall, a strong headline NFP report supported speculations that the Fed will raise its rates at least thrice this year, with the first one coming up this month.
Of course, it also didn’t hurt that Trump has provided Canada and Mexico a 30-day exemption from the steel and aluminum tariffs, which is an improvement from his no-exemptions rule before the announcement was final.
- Nikkei is up by 1.32% to 21,752.2;
- Australia’s A SX 200 is down by 0.03% to 6,014.3;
- Hang Seng is up by 1.53% to 21,469.2, and
- Shanghai index is up by 0.51% to 3,324.175.
Commodity prices also gained points early in the session, but gave up most of them by mid-day trading.
- Gold is flat at $1,322.90;
- Brent crude oil is up down by 0.02% to $65.5, and
- U.S. WTI is down by 0.03% to $62.07.
Major Market Mover(s):
AUD and NZD
Whether it’s risk appetite from a strong U.S. NFP, relief that Trump isn’t so inflexible over his tariffs, or a bullish day for China’s markets, high-yielding currencies like the comdolls received support today.
NZD/USD is up by 42 pips (+0.58%) to .7321;
NZD/JPY is up by 30 pips (+0.38%) to 78.04;
EUR/NZD is down by 65 pips (-0.38%) to 1.6829, and
AUD/NZD is down by 29 pips (-0.26%) to 1.0745.
AUD/USD is up by 20 pips (+0.26%) to .7866;
EUR/AUD is down by 13 pips (-0.0.8%) to 1.5664;
GBP/AUD is down by 26 pips (-0.15%) to 1.7620, and
AUD/CAD is up by 23 pips (+0.22%) to 1.0073.
The yen initially lost to its higher-yielding counterparts, but soon gained ground when Abe’s (and even Finance Minister Taro Aso’s) terms were put into question.
USD/JPY hit a high of 106.98 before it fell to 106.62;
EUR/JPY shot up to 131.69 before levelling off to 131.39;
GBP/JPY rose to 148.21 before falling to 147.77, and
AUD/JPY popped up to 84.10 before slipping back to 83.85.
Watch Out For:
- No major economic report on tap today. Read our previews to see which catalysts could dominate forex price action this week!